Hanna, Cameron target gross receipts tax as failure

By MITCH LIES

Capital Press

SALEM -- Now that Oregon voters have seen the job-killing impacts of Measure 67, they won't oppose changing it. That is the belief House Republicans take into the 2011 legislative session, which started Feb. 1.

The tax, commonly referred to as Oregon's gross receipts tax, has cost the state jobs and failed to deliver on promises of increased revenues, House Republicans said in a press conference last week.

Lawmakers adopted the tax in 2009, and voters supported in it a ballot referral in January of last year.

After balancing a state budget that is $3.5 billion in the hole, changing the gross receipts tax will be among the House Republicans top agenda items in 2011, the Republican leaders said.

Measure 67 increased Oregon's corporate minimum tax from $10 to $150 and required corporations with more than $500,000 in annual sales to pay more. Corporations with $100 million or more in annual sales pay a minimum tax of $100,000.

The tax does not distinguish between sales and profits, meaning businesses can lose money in any one year and still pay a top-tier corporate minimum tax.

At a press conference Jan. 24, Co-Speaker Bruce Hanna, R-Roseburg, said he doesn't believe voters will reject attempts to change the tax.

"Voters approved it based on something they were told," Hanna said. "The issue is, is what they were told coming true? The result is no."

House Republican leader Kevin Cameron of Salem said he believes Democrats will be open to tweaking the measure.

"I've been in several forums with local legislators, including (Senate) President (Peter) Courtney (D-Salem), and I've heard him say in front of the chamber that he is willing to sit down and talk about some sort of Measure 67 reform," Cameron said.

"We hopefully can come out with something that will send a signal to business to say, 'We heard you loud and clear. We're tweaking this thing, We're getting this thing right,'" he said.

The House Republican leaders said several bills have been introduced to change the tax, including one to repeal it, one that would set a sunset on the tax, and one to cap it.

Repealing the measure could help induce investment income coming into the state, Hanna said.

"Oregon continues to lag in invested income coming to our state, and we believe part of that is because people are looking and saying, 'I'm going to pay on whatever I sell, not on profit,'" Hanna said.

Establishing an office to audit state agencies and increasing revenues in the state's rainy day fund are other issues the Republican leaders singled out.